Is 'mishandling of tips' considered serious misconduct?

Employer argues worker had a supervisory role, violated staff's trust

Is 'mishandling of tips' considered serious misconduct?

The Fair Work Commission (FWC) dealt with a case involving an employee who alleged she was unfairly dismissed from work following a “purposeful mishandling of tips” in the workplace.

While the worker argued that she properly calculated tips, the employer contended that, based on its investigation, the worker mismanaged the tips, which ultimately constitute serious misconduct.

Background of the case

The worker was employed as a chef de partie at a restaurant in Southbank, Melbourne. Her position was a supervisory role and she remained in the position until the termination of her employment.

At the restaurant, all employees collectively agreed and decided that all tips would be pooled and distributed to all eligible employees based on their hours worked. The tips pool is split at the rate of 80% for front of house (FOH) staff and 20% for back of house (BOH) staff. The worker in this case was in the BOH group.

Three years later, while working for said role, the employee was dismissed from work related to her conduct wherein she had allegedly stolen tip money “that ought to have been distributed to other employees.”

The employer argued that allegations surrounding the worker had been proven following an investigation, including the mishandling of tips and the recording of a conversation without proper consent. Thus, there was a valid reason for the worker’s dismissal.

“The termination of your employment followed the allegations made against you regarding issues of integrity (including you providing a series of mistruths through earlier enquiries regarding this matter) and theft of tips from your colleagues,” the termination letter stated, according to the FWC ruling.

The employer argued that its supervisory staff are entrusted with responsibility to be aware of and implement its policies and procedures.

Meanwhile, the employee resisted the allegation that she purposely mishandled tips in the restaurant. “She explained that she undertook the calculation and distribution of tips as trained and instructed by the former Chef de Cuisine and the Sous Chef,” the FWC ruling stated.

“The [worker] did not accept that she had failed to carry out the task of calculating and distributing tips in accordance with the procedure, which she said she was trained,” it added.

FWC’s decision

The FWC noted that “there is no contest as to the existence and operation of the policy” which reflected the “agreed arrangements for the distribution of tips within the restaurant.”

“What is particularly at issue is whether the [worker], in calculating and distributing tips to BOH staff along with other senior chefs as she was occasionally required to, was aware of and applied the procedure in accordance with the tips distribution arrangements voted on by the staff,” the FWC said.

Considering all the matters, the FWC ruled that the worker’s dismissal was not supported by a valid reason. Thus, it found the dismissal unfair.

The Commission also noted that there was no direct witness evidence to the alleged theft of tips by the worker.

Moreover, while the FWC was satisfied that the worker’s responses during the investigation meetings were inconsistent, that evidence on its own is not enough to satisfy that the worker engaged in theft in the counting and distribution of tips to her colleagues.

The FWC also found that the worker indeed engaged in misconduct by covertly recording a conversation with an advisor without the latter’s knowledge or consent.

However, while constituting misconduct, the Commission was not satisfied that it rose to a level that would establish a valid reason for her dismissal.

Ultimately, while the FWC said that reinstatement would be inappropriate, it still awarded compensation to the worker.

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